South Waterfront

The timing of Regal's deal will mean a busy end of the year for the movie giant. The company is in the process of moving it's headquarters to Knoxville's South Waterfront, into a nine-story, 178,000-square-foot building.

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Construction continues on the Regal Entertainment Group's corporate headquarters at the South Waterfront on the former Baptist Hospital site Wednesday, Nov. 29, 2017. (Photo: Michael Patrick / News Sentinel)

The city helped put together a $12.5 million incentive package for the company and what the merger means for Regal, for the property or the city is not yet clear.

Per the contract between the city and Regal, the company is to lease the building from the city for 10 years with two 10-year extension options. According to the contract, Regal pays no rent the first 10 years, then rent of $178,000 a year through years 11-20 and $356,000 a year for years 21-30 if Regal opts to activate those years.

According to Chief Policy Officer and deputy to Mayor Madeline Rogero, Bill Lyons, Regal does pay a payment in lieu of taxes amount of approximately $45,000 the first year. For subsequent years, the payment continues at the amount determined by the tax assessor, he said.

According to the contract, if Regal fails to employ 275 full-time workers or if the building is no longer the company's headquarters, the rent goes up to $1.78 million a year for years zero through 10, $1.95 million a year for years 11-20 and $2.13 million a year for years 21-30.

The city can terminate the lease if the company either no longer uses the building as its headquarters for six consecutive months or does not employ 275 full-time employees for six consecutive months.

The terms of the contract apply if Regal merges with another company, according to the documents. There is not an automatic right of termination, according to Lyons.